2024-2025
Insurance Renewal
June 2024
City of
San Bernardino
(STATE OF THE MARKET INFORMATION HAS BEEN CONSOLIDATED FROM VARIOUS INDUSTRY SOURCES) 2 Contents
2023 Summary of Coverage
2024 Summary of Coverage
General Liability
Excess Workers’ Compensation
Cyber
Crime
2023 Summary of Coverage
Coverage Limits Deductible/SIR Premium
General Liability $25,000,000 $5,000,000 $1,857,247
Excess Workers’ Compensation Statutory $1,000,000 $553,696 Cyber $12,000,000 $100,000 $30,496
Crime $15,000,000 $2,500 $13,827
3 2024 Summary of Coverage
Coverage Limits Deductible/SIR Premium
General Liability $25,000,000 $5,000,000 Estimated
$2,229,000 to $2,415,000
Excess Workers’ Compensation Statutory $1,000,000 Estimated $694,000 to $714,000
Cyber $12,000,000 $100,000 Estimated
$33,500 to $45,700
Crime $15,000,000 $2,500 Estimated
$15,200 to $15,900
4 Insurance Market
& Financial
Performance
6 General Liability
Policy Year: July 1, 2024- July 1, 2025
Coverage Provided
• Bodily injury
• Personal injury
• Property damage
• Public Officials Errors and Omissions
• Employment Practices Liability
• Automobile Liability
Excess Limit: $25,000,000
Self Insured Retention: $5,000,000
Increasing Impact on Liability Market
7 Reduced Capacity
reinsurer withdrawals
have been significant
over the past two years
Litigation Financing
continues to drive large
claims. Funding increased
$3.5B in 2022.
Plaintiff Attorney
Strategies
specialization and strategies
have evolved to get larger
verdicts and settlements.
Hyper Social Inflation
1.7b award given in
Missouri on October 31,
2023 for conspiring to
inflate real estate
commissions and will triple
to 5.3b under US antitrust
law.
Labor Shortage
everyone is doing
more with less
Reviver Legislation
Amendments
A rise in Sexual Abuse and
Molestation claims and
settlements
Law Enforcement
Increased focus on
policing policy and
procedures
as well as pressure
on Qualified Immunity
Auto Liability
Frequency & Severity of
losses has returned to
pre COVID figures
Underwriter Scrutiny
reinsurers are seeking to
grow prudently and are
maintaining a disciplined,
conservative underwriter
approach.
Inflation
Rising cost are increasing
the size of claims
Exclusions
continued restrictions
surrounding sexual abuse,
Wildfire Exclusions,
COVID, cyber, opioids,
man made chemicals
(PFAS) and Biometric
Identifiers (new focus)
Emerging Risk
New Technologies such as AI, Telematics, Biometrics and machine learning systems risks are not fully understood given historical information
Environmental risks relative to climate change are substantial Growing concerns around mental health impacts including impact on productivity, access to care, medical inflation and the steady rise of healthcare costs 8 Source: Risk and Uncertainty Management Center, Univ. of South Carolina, adapted from Verisk “Social Inflation” presentation (2020); VerdictSearch. Figures are rounded to the nearest $1 million.
Source: VerdictSearch. Figures are rounded to the nearest $1 million Social Inflation: Many Interrelated Causes, Difficult to Manage
INSURANCE CLAIM COSTS
Courts/Juries
Favoring
Plaintiffs
Increasing
Propensity
to Sue
Size of Jury
Awards
Aggressive
Plaintiff
Bar Ads
Litigation
Financing
Growing
Distrust of
Large Corps.
Changes in
Regulatory
and Legal
Environment
Dollar Value of Top 100 verdicts by cause of action, in millions.
TOP VERDICT CATEGORIES
Worker/workplace
Negligence
$30,844
Intellectual
property
$18,726
Products Liability
$13,131
Intentional Torts
$5,710
Motor Vehicle
$2,417
Employment
$2,404
Professional
Negligence
$2,255
Medical Malpractice
$1,553
Business Law
$1,332
Toxic Torts
$1,160
2022
9 Excess Workers’
Compensation
Policy Year: July 1, 2024- July 1, 2025
The EWC Program provides the following special
coverage features:
• Volunteers included (subject to adoption of
resolution by employer prior to injury)
• No terrorism exclusion
• PRISM staff will coordinate a claims audit within
the first year of participation and/or change of
TPAs, and every two years thereafter
• Claims resources and oversight on the excess
reportable claims by highly experienced Claims
Specialists
• Legislative advocacy on key workers’
compensation bills
Excess Limit: Statutory
Self Insured Retention: $1,000,000
Workers
Compensation
Leading Concerns
Investment Yield on Long Tail Coverage
Rate expectations: Account Specific
Wage Inflation’s impact on premiums &
Medical Expense Inflation
Underwriter Concerns: Per Occurrence
exposure to Cat loss
Remote Work: Out of State employees &
Impact on productivity and compliance
10 11
Cyber
Policy Year: July 1, 2024- July 1, 2025
Coverage Provided
• Information Security and Privacy Liability
• Privacy Notification Costs
• Regulatory Defense and Penalties
• Website Media Content Liability
• Cyber Extortion
• First Party Data Protection
Limit: $12,000,000 aggregate limit of liability for each member (aggregate for all coverages combined) subject to the
$80,000,000 program aggregate limit of liability for all members combined
Self Insured Retention: $100,000
12 State of the Cyber Market
Europe May Surpass the United States as the
Most Targeted Region for Ransomware
Ransomware continues to have a significant impact on
businesses across the globe. While reports show that the U.S. is the country most targeted by ransomware attacks
worldwide,1 small indicators show that ransomware activity is decreasing in the United States and growing in other regions.2 In Europe. the number of victims is increasing. and if that increase continues. Europe will likely become the most
targeted region in 2023. The United States has been very outspoken on policies, sanctions and the potential of a response in the cyber domain concerning ransomware and
other attacks. However, it is hard to conclude if the more aggressive stance on ransomware actually deters attacks.
More Attacks by Non-Organized Attackers
and Non-Nation State Attackers
In 2023 we expect to see more intrusions conducted by non- organized attackers and non-nation state attackers. More of the threat actors operating out of North America and Europe will likely be younger, and conducting intrusion operations not because they're interested in making money specifically, or because governments have tasked them with doing it, but because they want to be able to brag to their friends or boast online that they've hacked into and brought embarrassment to prominent organizations. While they will be happy to achieve financial gain, that may not necessarily be
their lead motivation.
More Extortion, Less Ransomware
Historically, cyber criminals have used ransomware to
monetize access into a victim's network. Due to several high- profile and visible breaches last year, organizations see mitigating brand damage as a much more compelling reason to pay a ransom than regaining access to encrypted systems.
Over the next year, we will continue to see criminals rely on extortion, but actual ransomware deployments may decline.
Ransomware-as-a-service(RaaS) providers will modernize their software to focus on data exfiltration and ‘leak sites' for public shaming.
Clients with unfavorable controls will
see modifications to their program.
Carriers will exclude cyber extortion,
impose co-insurance, or exclude
coverages like computer hardware
replacement, and reputational loss.
Cyber Liability insurance providers
are requiring clients to have better
controls around cyber exposure.
Implementation of MFA is now
a requirement for most
insurance carriers.
Cyber liability pricing is beginning to
smooth out in terms of pricing.
We are now seeing carriers base
pricing on underwriting a specific
risk, rather than a broad-brush
approach to pricing which was
needed in the past to achieve carrier
profitability in this coverage line.
We are still seeing increases over
expiring for clients with losses, poor
cyber hygiene, or higher exposures.
We are seeing increases on average,
anywhere from 15-50% depending
on the particulars of a given risk.
13 Crime
Policy Year: July 1, 2024- July 1, 2025
Coverage Provided:
Governmental Crime Policy on Discovery Form including:
• Employee theft including Faithful Performance of Duty (Per Loss Coverage)
• Forgery or alteration including Credit, Debit or Charge Card Forgery
• Inside premises - Theft of money and securities
• Inside premises - Robbery or safe burglary of other
property
• Computer fraud and funds transfer fraud
• Money orders and counterfeit paper currency
• Outside the premises
Limit: $15,000,000 each occurrence
Deductible per occurrence: $2,500
Contact Your
Alliant Service Team
Robert Lowe
First Vice President
[email protected]
Kristen DesCombes
Associate Producer
[email protected]